Sunday, October 11, 2009

Zimbabwean Economy at a Glance

Current economic indications are pointing to an economic recovery on the back of determined efforts by the government to maintain sound macroeconomic policies, and to attract domestic and foreign investors and significant donor support. The situation could however deteriorate if the country fails to secure cash budget support and humanitarian assistance. Zimbabwe’s external debt burden is unsustainable even if policies are improved and medium-term financing gaps are filled by concessional financing.

An economic turnaround would not be possible without foreign assistance and private capital inflows, even assuming sound policy implementation. The fiscal discipline imposed by the multi-currency system would underpin a reduction in CPI inflation (in U.S. dollar terms) below 10 percent in 2009. Low inflation, the on-going liberalization of economic activities, and a gradual pickup in financial intermediation would help arrest the decade-long economic decline. The significant improvement in Zimbabwe’s terms of trade projected by the International Monetary Fund’s World Economic Outlook, and an expected increase in foreign credit lines and private capital inflows would also support economic growth.

Zimbabwe is a key player in the SADC region, much of the imports and exports from the region transit to the ports via South Africa. The economy requires big fundamental reconstruction which requires substantial investment and funding.

In an attempt to arrest economic decline, the opposition Movement for Democratic Change (“MDC”) and South Africa African National Union - Patriotic Font (“ZANU-PF”) formed a new coalition government in February 2009. The new unity government is working to rebuild the economy, and initial indicators hint at rapid growth from a low base. Much work lies ahead, and the unity government’s existence is hardly assured, but real Gross Domestic Product (“GDP”) growth could hit double-digit levels in 2010 as idle capacity is reactivated.

The country has formally recognized the use of foreign currency as legal tender in South Africa, and presented its budgets in United States dollars, as well as South African, dollars for the first time since independence in 1980. This should help end the scourge of hyperinflation, at least in foreign currency terms. The official recognition of foreign currency as legal tender is already paying dividends with hyperinflation now a thing of the past coupled with rising private consumption.

GDP which stood at -14 percent in the first quarter of 2009 is forecast to reach 2.8 percent in the fourth quarter and predicted to reach double digit in 2010. Figure 2 below shows the GDP trends over the years from 2000 to 2009.

GDP Trends 2000-2009

The Zimbabwean government still has enormous challenges ahead; it must convince investors that hyperinflationary policies will not be resurrected, demands for higher wages from civil servants must be balanced against miniscule government revenues, and the banking sector requires urgent rebuilding. The government is nonetheless moving forward on all fronts, and if the current policy trajectory continues, the economy could double in size within eight years.

The business environment is more fluid than usual, as business practice under the unity government is still uncertain. Liberalising policies have been introduced, a range of taxes are under review, and exchange rate risks have disappeared.

Risk Analysis

There are significant downside risks to the economic outlook:

Political Risk

Political disagreements among coalition partners may emerge, potentially resulting in policy reversals. The current government is however laying the groundwork that will make such moves increasingly difficult.

Economic Risk

-Budget revenue and foreign financing shortfalls could lead to a large compression in expenditure, which, in turn, may trigger social unrest.
- If wages exceeded levels justified by the economy’s productivity, competitiveness could suffer, resulting in output contraction and higher unemployment.
- The banking system, which has become more fragile because of hyperinflation, is subject to new risks under the multi-currency system. If these risks were not addressed in a timely manner, the intermediation capacity of the banking system would not improve and growth would suffer.
- If projected external private and official inflows, including financing to close the external gap, did not materialize, under the virtually complete dollarization, the resulting liquidity squeeze could lead to deflation.
-Significant capacity constraints pose a high risk to the implementation of the Short Term Emergency Recovery Program (“STERP”).

Saturday, October 3, 2009

Friday, October 2, 2009

Power and Success

Successful people command power in one way or the other. Power is the ability to get things done - your way. You get things done by giving direct orders to others, sometimes by making a suggestion or even asking for a favour. The end results (if you have power) will always be such that people act in a manner that you derive a benefit from their actions. Success is about getting what you want or desire. If you manage to get 75% of the things you want, to me you are successful.

There are various forms of power. Many authors and scholars have written books and produced papers about different manifestations of power. Those that are mentioned often by many authors are coercive, reward, legitimate, referent and expert power. Those that appeal to me are the "good ones" namely reward, referent and expert power. In my opinion successful people possesses at least two of these "good" forms of power.

For example reward power will have something to do with paying salaries, giving due recognition and praises to others and perhaps loving others unconditionally. Referent power on the other hand will have something to do with charisma, ability to magnetise and attract people. When you have referent power, you will always manage to pull crowds and turn heads. Sometimes products or services will be designed around you. Many politians, artist, business people and celebrities have referent power.

People who possesses expert power are those who have deeper knowledge or insights about a specific subject than average man and woman. Those with expert power are respected for their knowledge. They sometimes become legends.

Coercive power on the hand has something to do with forcing or coercing others to do as you want irrespective of their feelings or convictions. When you rule by fear and submission, you are a coercive leader. Typical examples will be dictators and gang leaders.

Legitimate power is the power that comes with a rank. For example police officers, military personnel, state president, husband or wife all have certain rights and privileges based on the power bestowed on them. You can say that legitimate power is a legislated power.

One can have power in many ways. You have power over your employees because you pay their salaries. Being a successful business owner or rising to the top office in an organisation is very fulfilling to others. In this way they get the respect and recognition they deserve. The bigger the organisation or the company they own, the more the power they command.

If you are an expert in a specific field, it is because you know the best way to handle matters. Your are in the best position to use your expert status to command respect and power. You have the power set your own market price and choose who you associate with. Many people who are successful in their careers are leveraging on their unique knowledge of what they do for a living.

If you have credit cards, you can go into a store, hotel or restaurant in any city and order whatever you wish. This kind power, if utilised effectively can enhance you success immensely. Imagine dinning in the best restaurants along side the rich and powerful. (Notwithstanding, be careful when using your credit card because credit cards are known to be debt traps).

Then you are successful and powerful in politics, people will give you their votes, hoping that you will work and succeed in getting the government to serve them in their area.

There is also power that is derived from being talented, charming and capable; of being up-to-date and knowledgeable. With this power people will know that when they let you handle things for them or listen to your advice, they will come out ahead. There are many people that are paid top dollars to talk and motivate others. Many former CEO's and other great personalities are paid more money per hour by companies to motivate staff than what many of us get per month. How is that for power and success?

In fact if you want a dose of knowledge and insightful wisdom from some of the sharpest brains in "getting things done" you have to get yourself a 460 page e-book called The Top 101 Experts That Help Us Improve Our Lives. This is a remarkable book that is bound to change your approach to life forever.

Coming back to our topic, well we have one more thing to say; this concerns the aspect of power that have something to do with competition.

If the entire world was fair and equal, there would be no need for the upper hand. But of course the world is not like that. This implies that in a competitive situation you cannot merely settle for the generosity of your competition. You must keep your eyes wide open and indeed all your faculties in their most acute and sharpest alert mode. Be open for any clue or tips that will tip the scale in your favour. When the scale has tipped to your side, take what is duly yours, nothing more - nothing less. Get what you deserve and get it fairly. If you go all out to destroy your competition or your enemies, you create another bigger enemy - yourself.

There has been lot of prestige attached to destroying competition but history tells that those that follow this silly advice end up attracting more competition. This had to do with the Law of Attraction and signals from your subconscious mind. The truth is the world respect those that are fair and firm. Always take what you deserve and leave the rest; you will be successful and you will command respect and power even from your arch-enemy.

Women in Mining

With the help from Mining Qualifications Authority (MQA), the South African Women in Mining Association (SAWIMA) was established in 1999 to support women entrepreneurs in the mining industry. It was later launched in December of the same year by the then Minister of Minerals and Energy, Ms. Phumzile Mlambo-Ngcuka.

Scope of SAWIMA has been broaden to assist companies owned and/or managed by women to obtain mineral rights, to empower women with skills in order to manage their mining companies better and to promote women empowerment in the mining sector.

To advance the course of women in mining, SAWIMA lobbies the Department of Minerals and Energy (DME) and other government bodies on issues pertaining to development of women in mining, collaborates with MQA in the provision of appropriate training programmes for women in mining and work in partnership with organisations such as Technology for Women in Business (TWIB) and other continental bodies to help women in general.

The course of SAWIMA is closely linked to the provisions of the 2004 South African mining charter which requires mining companies, among other things, to ensure “higher levels of inclusiveness and participation of women” in the mining sector. Furthermore the charter set a baseline target of 10% participation of women in mining by 2009.

Historically mining has been dominated by men, both locally and globally. This can partially be attributed to dangerous conditions associated with mining, harsh and strenuous activities associated with winning of minerals and possibly our patriarchal tendencies.

To ensure proper representation of women across South Africa, SAWIMA has established branches in all nine provinces. Activities of the association are coordinated by board members under the leadership of Alice Phatudi, the current chairperson of SAWIMA. Board members are the chairpersons of provincial branches, representatives of DME and individuals from corporate.

The head office of the association is in Gauteng Province.
In 2003 SAWIMA registered South African Women in Mining Investment Holdings Pty Ltd (SAWIMIH), an investment arm of the association. SAWIMIH is a broad based economic vehicle and is largely owned by SAWIMA members. It is envisaged that through SAWIMIH, members of SAWIMA will be able to participate and benefit from economic growth in the mining sector by taking ownership or equity in companies within the sector.

Majority of SAWIMIH management are women and its board consists of successful women in their own respect. Among the board members is Dr. Nellie Mutemeri, a geologist by background with experience stretching beyond the borders of African continent. Dr. Mutemeri heads the investment committee of SAWIMIH. Outside SAWIMIH she was the Manager of Small Scale Mining at Mintek.

To correct historical past is not an easy feat as attested by the current Minister of Minerals and Energy, Buyelwa Sonjica. In October 2007 during the 4th Annual General Meeting of SAWIMA, the Minister said, "the empowerment of women in the industry is a bit slower than I expected, but what is important is that women are finally involved in the industry and benefiting from procurement." This statement was made roughly two years before the end of 10% baseline participation of women in mining as stipulated by the mining charter.

One of the identifiable impediments against significant participation of women in mining is access to funds for pre-feasibility studies. This type of funds is regarded as a high risk investment by financiers. To overcome this obstacle the DME has established a fund to assist women with pre-feasibility studies. However the fund at this stage depends on the generosity of third parties.

Habits of Success

  1. Successful people love and care for the others. Their actions are aimed at aiding and developing fellow human beings but do not try to be the answer to all ills in the world.

  2. Successful people learn and grow constantly. They associate and learn from other successful people. They have a wealth of self-improvement material from which to refer from time to time. On the other hand they also learn from unsuccessful people because in failure there is lesson to be learned.

  3. Successful people make decisions daily. They are quick to make decisions and take time to change them because they have learned to trust their instincts. Unsuccessful people on the other hand are indecisive and when they do make decisions, they change them quickly due to lack of confidence in their decision making capabilities.

  4. Successful people feel good about “this moment”. They say “today is a perfect day”. They know that yesterday is gone, today is a present and through prayer, tomorrow will even be better. They will go out into the world to make their mark for others to learn and benefit.

  5. Successful people concentrate on productive activities because they know what is important to them. They do not waste time on unproductive and trivial issues. Life is much more important to be squandered on time-wasters

  6. Successful people nurture and grow their personality because they do not agree with those that say personality and traits are inherited from birth. They know that leaders are not born but sculpture themselves into leadership positions. They are constantly working on their people, communication and relationship skills.

  7. Successful people just do it. Life is fun that way. They have heard and seen the effects of "analysis paralysis".

  8. Successful people manage their stress by:

  • Fully focusing on what they do; they loathe distractions.

  • Planning in details before hand. They acknowledge the imperfection in their plans but get comfort in the clarity they bring.

  • Avoiding doing too much. They delegate well and outsource their weak areas but assume overall responsibility all the time.

  • Arranging their schedule to have enough time to relax and enjoy life with family and friends.

  • Avoiding being too perfect, in fact they focus on being effective rather than being perfectionist because they know that this world is not a perfect world but it accommodates optimised solutions.

  • Being happy about success, they celebrate success and reward themselves well.

  • Not being unnecessary frightened by future because they know that there are good times and bad times in life and we all are going to go through them at any given point in our lives.

  1. Successful people live a dream. They allow themselves to dream because they know that inspirations comes from dreams.

  1. Successful people take care of their bodies by:

  • Eating healthy

  • Exercising regularly

  • Having enough sleep

  • Laughing regularly

  • Drinking enough water

  1. Successful people give 110% effort because they understand the relationship between input and output. They are efficient on the input side and maximise the output to their benefit and humanity as well.

  2. Successful people tolerate differing opinions because they know they can learn from other people with differing opinions and perspectives.

Top 7 Investment Opportunities For Retail Investors

In the current environment where global inflation is rising and simultaneously eroding investor confidence, there are still few avenues where investors can invest and reap the benefits in the long term. Investment opportunities explained below are suitable for investors who are looking for value in medium to long term. Be warned though that all investments carry certain amount of risk and before investing your hard earned money, you should seek the advice of a qualified financial advisor or planner registered with Financial Services Board (FSB).

The following are the top seven investment opportunities for retail investors:

Stocks/Equity/Shares - This investment vehicle is known to give very high returns but you need proper training to invest in tradable stocks on the stock market. You can either invest based on your direct research of the market or you can subscribe to the services of a research company that provides proper analysis of tradable stocks. There are many companies in the market that provide such services. There are even websites that give investment tips online but one thing for sure – do not accept free investment tips. Have you ever seen a free professional service!

Mutual Funds - You may want to invest part of your money in the stock market through mutual funds or unit trusts. Mutual funds are less risky proposition for people who want to invest in stock market but do not know how to trade. Go for 50:50 mix of dividend and growth scheme. Currently mutual funds are priced attractively and there are plenty of good investment opportunities. Look for two to three years timeframe for reasonable returns. You may also look for closed ended tax saver or tax benefit schemes in which your money will be locked for three or more years.

Land - With appropriate bank loan or cash payment from your savings or investment portfolio you look can into buying land near developing areas such as airports or commercial centres. This investment can give you high level of returns in the long term. The only problem with land is that it needs to be protected well from encroachment and false suitors. One thing to remember is that lands far from major cities are cheap but yield very little growth and are difficult to maintain and protect.

Under-constructed units from reputable developers – With a loan from your bank, you can invest in a good three or four bedroom unit which is under construction or chosen from a plan of a reputable developer with a stable business. By the time the unit is ready for occupation, normally the price would have appreciated and you can make a good return on the money you borrowed from the bank. Here the emphasis is a reputable developer with good track record, prime location with potential to appeal to many people and good quality units. These aspects will firstly ensure successful completion of the development and secondly appreciation in value once construction is completed. Caution: make sure that you can service you bank loan or bond while still looking for a prospective buyer.

Gold and Silver – Physical gold and silver (especially gold) are traditionally seen as safe havens and preservers of wealth especially in times of uncertainty or rampant inflation. The only problem with physical gold and silver is storage or security. You will have to find a suitable place to protect them from unwelcomed scoundrels.

Bank Fixed Deposit - If you want a highly secure investment vehicle then go for age old bank fixed deposits. With bank fixed deposit, your initial investment is secure but the growth thereof will hardly beat inflation. Also one should not deposit all the money in one bank but diversify across at least three banks to minimise the solvency risk although you can do very little if bank contagion ever occurs.

Government Infrastructure Bonds - This can be a good investment with good future returns more so when looking at government spending on infrastructure, developmental agenda of Eskom and infrastructural developments of metropolitans such as City of Johannesburg. You may also seek the advice of a FSB registered and reputable financial advisor with respect to schemes that are linked to infrastructural bonds or socially responsible investment (SRI) funds.

About the original author:

Arth Sutra provides NSE BSE Trading Tips and Trading Recommendations for Australian and US Stock Markets. Visit us for 4 week Free trial for NSE BSE Stock Tips. Also subscribe to our FREE Weekly Global Market Analysis newsletter for in-depth analysis of stock markets across the globe. Visit Indian Share Market Tips for more information.

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Zimbabwean Platinum Mines

Article by Greg McCoach

Platinum is extremely rare, occurring at only 0.003 parts per billion in the Earth's crust. This makes it the most precious of all precious metals about 30 times rarer than gold. In fact, it's so rare that if all the platinum in the world was poured into one Olympic-size swimming pool it would scarcely be deep enough to cover your ankles.

Unlike most other commodity metals, which are found commonly throughout the world, major platinum deposits are limited to two main areas: Africa and the Commonwealth of Independent States (the former USSR).

South Africa is by far the most prominent platinum-rich regions in the world. The country accounts for approximately 80% of the world's total annual platinum production and contains an estimated 88% of the world's platinum reserves, with a proved and probable reserve of 6,223 tons, or 223 million ounces.

There are other platinum deposits throughout Africa, including in Zimbabwe, where a significant potential source of platinum has been well-known for several decades, but it isn't until now that platinum mining companies are starting to make real progress.

Platinum Mining Companies: Tapping Into the Great Dyke

The Great Dyke is a 2.6 billion-year-old geological feature that runs right through the heart of Zimbabwe for about 550 kilometers in a north-south direction.

The geologist and explorer Dr. Carl Mauch first recorded the Great Dyke in 1867, but it wasn't until the early 20th century that the presence of platinum, and other minerals, was discovered.

Early attempts at mining the platinum out of the ground were generally unsuccessful, and it has only been relatively recently that platinum production has reached significant levels.

Zimbabwe Platinum Mines

Zimbabwe's oldest platinum operation is the Mimosa mine, located in the southern part of the Great Dyke on the Wedza geological complex. Ownership of the mine is currently split 50/50 between Impala Platinum Holdings Ltd. (JNB: IMP, OTCBB: IMPUY) and Aquarius Platinum Ltd. (ASX: AQP, LON: AQP, OTCBB: AQPBF, JNB: AQP).

Platinum mining at the Mimosa complex has a long history. The deposit was exploited briefly in the 1920s, and trial mining was undertaken by Union Carbide Zimbabwe (private) between 1966 and 1975.

Zimasco Ltd. (a private ferrochrome mining and smelting company) took over the Mimosa operations in 1992. The pilot plant was refurbished, and mining recommenced in 1994, gradually building up to a rate of just under 30,000 tonnes of ore per month. Although small, the operation was very successful, and began to attract the attention of the South African platinum producers.

A proposed acquisition of the complex by Anglo American Plc (NASDAQ: AAUK, LON: AAL, NAM: ANM, JNB: AGL) collapsed in 2000. The following year Impala Platinum acquired a 35% stake in the mine. In 2002 Impala took a further 15% with Aquarius Platinum taking the remaining 50% of the company.

Since 2002, output at Mimosa has gradually been expanded, and the mine, which is among the lowest-cost platinum producers in the world, extracts around 85,000 ounces of platinum annually.

During the early 1990s, a second mine, the Hartley Platinum project, was developed by a joint venture between the Australian companies BHP Billiton Ltd. (NYSE: BHP, ASX: BHP, LON: BLT, JNB: BIL) and Delta Gold Ltd (now a part of Zimplats). It opened in 1995, but following a string of geological and metallurgical problems, underground operations were suspended in June 1999.

BHP's interest in Hartley Platinum was sold to Zimplats Holdings Ltd. (ASX: ZIM), a spin-off of Delta Gold's platinum assets, which began to develop a new open-cast mine further south, at Ngezi. Operations began in 2001, following the acquisition of a share of the project by Impala Platinum and the South African bank Absa Bank Ltd. Over the next two years, Impala increased its holding in Zimplats, and by June 2006 it held 86.9% of the company.

In 2006, Ngezi produced about 90,000 ounces of platinum, from an open pit and from a newly-developed underground section. Impala now plans to increase production to over 150,000 ounces of platinum per annum, which will involved the construction of two new underground sections and will cost an estimated US$258 million.

A third platinum mine, Anglo American's Unki project, is expected to begin producing 58,000 ounces per year of refined platinum by 2010. Anglo American recently said that they plan to invest $400 million to build the mine despite pressure from the British government to withdraw from the country.

Zimbabwe president Robert Mugabe has been condemned over violence against the political opposition ahead of the second round of presidential elections. The $400 million investment would be the largest foreign investment in Zimbabwe ever.